Market Crisis Brings a Different Battle Cry
Since at least 1980, the Republican Party mantra has been Ronald Reagan's favorite line: "Government isn't the answer, it's the problem."
Today, with the federal government frantically pledging hundreds of billions of dollars to save our financial and auto industries -- and our economy, some say -- we are told: "Government is the only answer!" The situation is so dire, in both fiscal and political terms, that even a deregulator like John McCain is forced to join the swelling chorus of "regulate, regulate, regulate."
Like so many issues in our daily lives, we are driven by emotional assertions of reality that are as fervid as they are hollow. None more so than the maligning of "government" -- a bugaboo which is, of course, one we ourselves have created -- and which to a large extent created the present crisis. Perhaps it is now time we start thinking a little more rationally about this bugaboo.
First, we need to acknowledge that the tone and direction of government is set by our election process -- a process that is too long, too expensive, and too morally and ethically corrupt. Its deficiencies are perennial topics of discussion without action. For that, we have only ourselves to blame. Seldom do as many as 50 percent of eligible voters cast a ballot in a presidential election; and the voter turnout for other federal, state and local offices is lower still.
One of the most pervasive misperceptions about the federal government is that, to a significant degree, its growth is due to "empire-building" by "bureaucrats." Undoubtedly, there is some basis in fact for that perception. As in any other organizations, employees in government can become overly committed to their mission and convince themselves that more is better, but that tendency cannot explain the growth in government.
And it should be noted that, as a budgetary matter, civilian employment is not very significant -- less than 1 percent of total expenditures in 2007. So, if searching for the source of waste in federal programs, one need not look much further than the president and the Congress -- who, together, fund, shape and promote those programs.
While the president and the Congress are the source of all federal programs, their role is often that of responders rather than initiators. In many respects, the growth of governmental intervention, through both the purse and regulation, is an inexorable process.
From the dawn of the Republic, government has grown erratically but steadily in its size and in its impact on the affairs of the citizenry. In the 19th century, that growth was obviously driven in part by the nation's territorial expansion -- an expansion that ended in 1898 with the acquisition of Hawaii as a territory.
The Population Factor
Although no single factor can account for the growth in government, certainly increased population density is among the most significant.
Since the final establishment of our borders, every increase in population leads necessarily to an increase in density and, with that, an increase in personal and business interactions and the conflicting interests inherent in those interactions. Intervention at some level of government is usually requested to resolve the conflicts or required to deal with their collateral effects on society.
A look at some of the data is instructive.
In 1930, 56 percent of the population lived in urban areas. That figure rose to 64 percent by 1950, to 73 percent by 1970, and today stands at 80 percent -- of 305 million people, 240 million are now living on just 2 percent of the land.
Between 1960 and today, state and local employment has risen (reasonably or not) from about six million to 20 million, an increase of 320 percent. Much of that increase is attributable to the varied consequences of urban sprawl. In that same period, federal civilian employment has, with some ups and downs, been essentially flat -- from 2.4 million to 2.7 million.
The growth in economic activity, only in part related to density issues, is the most significant force driving governmental intervention at the federal level. As measured by gross domestic product, economic activity grew in constant dollars by almost 460 percent between 1960 and 2007.
Not an Uninvited Stranger
We strive for a free-market system because it results in the most efficient allocation of resources. If economic efficiency were the only societal goal, the need for government regulation would be minimal. But economic efficiency can be ruthless in its application, especially when there are imperfections in the market system leading to abuses -- the current crisis being the archetype.
Finally, we must recognize that government is not some uninvited stranger the populace, to its horror, finds eating at its dinner table. Invariably, we find that the populace has invited the government to take a seat in order to meet some real or imagined problem then besetting the nation or some segment thereof.
In economic terms, we purchase government services just as we purchase the services of the local drugstore. The difference is that our decision to purchase is a collective one in the case of government and an individual one in the case of the drugstore -- and the two are vastly different. The collective decisions are made by majority vote, and 49 percent of the voters might not want what is being purchased. None of us get exactly what we want from government. But we do get exactly what we want from the drugstore and pay only for that.
The purchase of government services is inherently divisive simply because in every instance there is disagreement among the buyers either as to the need for, or the quantity of, the service being purchased. In a democracy, government can function only by compromise.
While each of us may accept the need for compromise, it does not follow that we accept the consequences of it. And, as a consequence of that, there is a lot of unwarranted complaining about government -- unwarranted because it is the product of the system we have voluntarily established and functions as our votes dictate.
A Futile Cry
In sum, we cannot expect to have smaller government as long as there is steady growth in population and economic activity.
So until there is a fundamental change in human nature, the cry for less government will remain a futile one. The only realistic goal is one of "good government." The maxim "that government is best that governs least" should be amended to "that government is best that governs efficiently, and only where governing is necessary."
As any private enterprise is only as effective as the people in it, so is it the case with government. We cannot continue mindlessly to denigrate government without continuing to employ and appoint people who are incapable of improving it.
J. Thomas Tidd, a retired lawyer who practiced in Washington, lives in Pinehurst.
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